RBI pulls up HDFC over outages, tells bank to halt all digital launches, new credit cards

Private lender HDFC Bank on Thursday said the Reserve Bank of India has advised the bank to temporarily stop all digital launches and sourcing new credit card customers. This after the bank suffered its third big outage in the span of just two years. The RBI order also states that the lender’s board needs to examine these lapses and fix accountability.

“The RBI has advised to stop all launches of the Digital Business generating activities planned under its program - Digital 2.0 (to be launched) and other proposed business generating IT applications and (sourcing of new credit card customers,” the bank said in an exchange filing. “The above measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI.”

ET in its edition on November 23 had reported that the regulator has sought an explanation from HDFC Bank about an interruption in digital services on November 21. This is the third disruption of digital services that HDFC Bank customers have faced in the past two years, causing many of them to vent on social media. The outage happened due to a power failure in the primary data centre of the bank.



The regulator had sought details behind the data centre outage that meant services on the Unified Payments Interface (UPI), ATMs and card channels were unavailable for several hours.



“The bank over the last two years has taken several measures to fortify its IT systems and will continue to work swiftly to close out the balance and would continue to engage with the Regulator in this regard,” the lender said.

“The Bank has always endeavored to provide seamless digital banking services to its customers. The Bank has been taking conscious, concrete steps to remedy the recent outages on its digital banking channels and assures its customers that it expects the current supervisory actions will have no impact on its existing credit cards, digital banking channels and existing operations.”

In December last year, the RBI had said a team of experts was examining the breakdown of HDFC Bank’s digital banking channels that occurred early that month, causing millions of customers to be locked out of their net and mobile banking accounts for over 48 hours.

The bank had faced a similar outage on its mobile application in 2018, while launching a new version. As of September 30, the bank had 15,292 ATMs in 2,848 cities. Its customers have 14.9 million credit cards and 33.8 million debit cards, according to RBI data, making it one of the largest transaction banks in the country.

The private sector lender was the third-largest remitter bank in October on the UPI network behind State Bank of India and Axis Bank with 179.5 million transactions and a technical failure rate of 0.81%, according to National Payments Corporation of India (NPCI) data.

The bank’s servers were down three days running in December last year, owing to “increased payday transactional activities,” which had prompted the central bank to initiate a similar probe. While the findings of these investigations were not made public, then executive director and current CEO Sashidhar Jagdishan had publicly refuted the possibility of any external attack.

As reported first by ET, the record surge in online payments since the start of the pandemic has tested the strength of the country’s payment infrastructure. Transactions through UPI spiked to 2.07 billion transactions worth Rs 3.86 lakh crore at the end of October from 999 million transactions worth Rs 1.51 lakh crore in April.